The Canadian market closed higher on Wednesday

Image Source : Krish Capital Pty Ltd

Index Update: The benchmark S&P/TSX Composite Index closed up 29.87 points or 0.12% at 25,311.50.

Macro Update: Data from Statistics Canada showed industrial producer prices in Canada rose by 0.2% month-over-month in December, following a 0.6% increase in October. On a yearly basis, producer prices surged 4.1% in December, the sharpest increase since January 2023.

Concerns about tariff threats by Trump limited market's upside. The U.S. President has repeated his threat to impose tariffs on imports from European countries. He also said his administration was discussing imposing an additional 10% tariff on goods imported from China, starting in February.

Top Movers: Celestica Inc (CLS.TO) gained about 4.7%. Toromont Industries (TIH.TO), GDI Integrated Facility Services (GDI.TO), Toromont Industries (TIH.TO), WSP Global (WSP.TO), Nutrien (NTR.TO), Calian Group (CGY.TO), Stantec (STN.TO), goeasy (GSY.TO), Stella-Jones (SJ.TO) and TerraVest Industries (TVK.TO) closed higher by 2 to 4%.

Our Stance: From a technical perspective, the index remains in a favorable position, staying comfortably above its 21-period Simple Moving Average (SMA). This suggests that the bullish trend is intact, and with the Relative Strength Index (RSI) at 59.79, there's still room for further upside without signaling overbought conditions. However, the index is currently testing a crucial support level around 24,900. If it successfully holds above this mark, it could pave the way for continued growth.

Commodity Update: The dollar remained steady on Thursday, showing little movement ahead of upcoming tariff announcements from U.S. President Donald Trump. Market attention is also focused on upcoming central bank decisions, with the Bank of Japan expected to raise interest rates at the end of its two-day meeting on Friday. The U.S. Federal Reserve and European Central Bank are set to announce their rate decisions next week. In commodities, gold dropped 0.17% to $2,760.60, silver fell 0.75% to $31.18, and copper declined by 0.77% to $9,171.50. Brent crude saw a slight drop of 0.30% to $78.79 per barrel, with uncertainty surrounding global tariffs affecting energy demand.

Technical Update: On Wednesday, the S&P/TSX Composite Index showed modest yet encouraging gains, closing up 29.87 points at 25,311.50, a 0.12% increase. The market's positive movement was underpinned by strong trading volumes, indicating sustained confidence among investors. The technology sector stood out, driving much of the day's rally with a 1.32% surge, which reflects a growing optimism in tech stocks and the broader market outlook. From a technical perspective, the index remains in a favorable position, staying comfortably above its 21-period Simple Moving Average (SMA). This suggests that the bullish trend is intact, and with the Relative Strength Index (RSI) at 59.79, there's still room for further upside without signaling overbought conditions. However, the index is currently testing a crucial support level around 24,900. If it successfully holds above this mark, it could pave the way for continued growth. On the flip side, any dip below this level might trigger retracement risks, with key support zones to watch between 24,600 and 24,300. The ability of the index to maintain its position above these levels will be crucial for sustaining the current bullish sentiment and potentially unlocking further gains in the near term.